Are Your Salespeople Selling Customers Or Developing Clients?

Furniture World MagazinePosted: 6/25/2004

ABC's of developing and managing strong client relationships.

Clientele development is an important, yet often neglected part of furniture store retailing. Once you've drawn a first time customer to your store, it is much easier to retain that customer than to attract someone new. Over the course of just a few short months, effective clientele development can have a meaningful positive impact on sales. Unfortunately, many owners and sales managers are so busy handling other aspects of their jobs, that client development isn't a priority. This article explains the most troublesome roadblocks that prevent salespeople from developing clients and illustrates how to overcome these roadblocks

Let's start with a definition. What is a customer and what is a client? Simply put, a customer is someone who buys a piece of merchandise from a store. The sales person is nothing more than a facilitator, an intermediary that consummates the sale. If little to no effort is made to establish a relationship with a customer, the next time that customer needs furniture he or she will not be inclined to seek out the assistance of that particular sales person. A client, on the other hand, is someone who buys his or her furniture from a specific sales person who happens to work at a given store. Clients have sales people who take the time to build and nurture relationships. These relationships are generally built over time, during visits to the store, phone calls, possibly house call visits, etc. By understanding the client's home needs, likes and dislikes, personality, etc. the sales person is able to bring a great deal of value to the buying process. In return, the client keeps going back to that sales person time after time and even recommends him or her to other people. The client is rewarded, the sales person is rewarded, and the store is rewarded.

It is clear that:

There are major differences between clients and customers.

There are significant advantages to having a strong client base.

Unfortunately, time and time again, retailers explain that their sales people do not develop clientele. They are frustrated by sales people who prefer to wait for new (high cost) advertising generated customers to walk through the door. In order to replace this bad habit with a beneficial one, you need to understand the roadblocks that prevent clientele development from happening in the first place. It is easy to blame sales people. In many cases they are the root of the problem, but there are also issues outside of the sales person's control including: staffing, the greeting system, skill development, sales culture, store facilities, database handling, and the owner's attitudes.

STAFFINGUnderstaffing is one of the chief reasons for poor or nonexistent client development efforts. Why should sales people make the effort to turn customers into clients when they have a never ending stream of new customers from which to draw? Furthermore, the sales person's conventional wisdom has always been that a brand new customer with new needs is "worth more" than previous customers. Nothing could be further from the truth.

The problem is that most retail managers staff floors based on their sales persons' work habits. There are generally only enough sales people on the floor to handle customers who walk in. This doesn't allow time for client development. Most sales floors are so understaffed that sales people:

Do not have the time to develop clients.

Have absolutely no incentive to do so because they have an endless stream of new customer opportunities.

In order to encourage client development efforts, retailers must control the number of customers each sales person serves by staffing their sales floors appropriately.

THE GREETING SYSTEMInappropriate greeting systems are especially dangerous because they give sales people the false impression that they are turning customers into clients. Staff members scratch each others backs by asking incoming customers if they've visited the store before, and if so, with whom they worked. In doing so, these systems advance the belief that sales people 'own' their customers even though those customers have not become clients per se. It leaves absolutely no incentive for sales people to do the things that motivate customers to ask for them. If we remove this pre-qualification system, then and only then, will sales people do what is necessary to create true customer loyalty. That loyalty is illustrated every time a client proactively asks for someone in particular.

SKILLS DEVELOPMENTSales people can be very disorganized. On the other hand, managing a client database requires some level of organization. In many stores, sales people occupy such disorganized work areas that they can not possibly handle a formalized clientele management process. They simply lack organizational skills. Fortunately, these skills can be taught. But, like anything else, once taught they have to be reinforced. Once sales people accept the concept of clientele development, they must be assisted and managed. When they drop into their old disorganized behavior, the sales manager needs to be able to help them, especially when it prevents them from managing their databases.

SALES CULTURESales people will also tell you that customers do not want to be telephoned at home. If this is what you are hearing, it is an indication that your customers are not being handled properly in the store. Clientele development does not start once the customer leaves the store. It starts as soon as customers are greeted and continues throughout the sales process. Unless a relationship has been effectively established from the beginning, customers may find follow-up calls irritating. But if a positive, customer-driven relationship has been established, most are delighted to receive follow-up and are often impressed when it happens.

STORE FACILITIESThe very same owners who complain about the lack of clientele development often balk at giving their staff the tools they need to succeed. Sales people need a quiet facility off the floor where they can make their telephone calls, a desk or desks, and telephones. Telephones, in many stores are an especially big problem.

On one hand owners can be reluctant to invest in a telephone system that will handle the needs of their staff. On the other hand, sales people complain that they can't develop clients without telephones - and they're certainly right. Tools have to come first, because without proper tools, there can be no follow-up system. If you allow supplies such as stationary and thank-you cards to run out, your follow-up system will grind to a halt. If you make the investment and ensure that clientele development is properly implemented on an on-going basis, the tools will pay for themselves.

DATABASE HANDLINGThere are two ways sales people can maintain their individual client databases. The most common is a card box system that maintains contact information on index cards. The other option is an automated system that uses contact management software on a PC. I'll address both. Clientele development boxes are used often, but are seldom used properly. Each sales person should have her own box, index cards, and index tabs. I can always tell that the clientele development process is not happening when the cards are filed from A-Z.

A box organized from A-Z will tell the sales person how to contact Mrs. Jones but it won't tell when to contact her. The only way a box can work is if it is organized as a 'date tickler', that is, the cards are filed in order from January through December. Every time the sales person finishes with a client, she decides when to contact that client again. The card is slipped behind the index tab for that month. If she needs to contact a client in March she would put her card in the March slot. When March rolls around she pulls out all of the cards behind the March tab and puts them behind the 'current' index tab. It's a very simple process, but, when done properly, it works.

I have one important caveat. Card boxes must be purchased by the company for a very serious reason. If we allow sales people to buy their own tools (e.g. boxes, cards, books, software, etc.) they own those tools. When someone leaves the organization she takes her system and all of the contact information with her. We lose not only an employee but a complete listing of every single client that worked with her along the way (e.g. home descriptions, what she purchased, her design tastes, etc.). This information could be devastating in the hands of a competitor. If a sales person leaves the company, those tools should remain at store to be distributed evenly amongst the remaining sales people so they can develop new relationships.

The latest trend in client development is contact management software. It can be purchased for as little as a few hundred dollars to as much as $5,000 for elaborate, furniture specific systems. Although these systems could work, I have yet to see one work effectively in a retail home furnishings setting. Because of all the reasons mentioned above, most sales people aren't even doing clientele development manually. If they're not doing it manually, they certainly aren't going to use an automated system. Automating a process that isn't even being done is a waste of time and money. However, once the process has been implemented manually, and is functioning effectively, an automated system can be an excellent next step.

THE OWNER'S ATTITUDEAs simple as it sounds, we often fail to ask our sales people to develop clients. Owners make references to the value of clientele development with hopes that something might sink in, but that rarely happens. The bottom line is that sales people haven't been asked because we haven't held them responsible for contributing to the company's growth. Instead, we have relied on advertising to generate traffic. Occasionally clientele development becomes a priority when a store suddenly faces a slow period but it's typically sporadic at best.

Clientele development needs to be given a higher priority. We need to get agreements from our sales people that they have a responsibility for developing clientele. It should be written into their job descriptions, measured, and managed just like any other on-going responsibility. If clientele development isn't happening it's the responsibility of the sales manager or owner to get the process back on track, and it is the sales person's responsibility to maintain the process. Gone should be the days when sales people could count on your investment in advertising to fulfill their individual needs. They too should invest their time and effort to increase their personal value to the company.

CONCLUSIONWe all know clientele development is important. Unless we address the above issues, however, it will never happen. In summary, here's how to make it work.

You must have enough sales people on the floor to allow for adequate clientele development time.

You need to give them a vested interest in the process by making it their primary method of generating additional sales and "be backs."

Remove greeting systems that create false loyalty.

Give sales people the time management and contact management skills necessary to manage a database.

Eliminate the perception that clients do not want to be contacted and understand that this excuse could be an indicator of a more serious problem - customers not being handled properly to begin with.

Sales people need the tools and the facilities to do the job.

Make it clear that this process is an important part of their jobs. Make sure to to continually manage the client development process.

SELLING CUSTOMERS OR DEVELOPING CLIENTS CHECKLIST

Adequate staffing to allow for enough clientele development time.

Make repeat sales and be-backs a primary method of generating their sales volume.

Remove greeting systems that create false loyalty.

Provide the time and contact management skills sales people need to manage a database.

Give salespeople the tools they need to do the job.

Eliminate the perception that clients do not want to be contacted... by working on customer driven selling.

Establish the importance of the clientele development process as a primary sales function.

Ted Shepherd is the founder and CEO of Shepherd Management Group. The company specializes in changing the selling culture of furniture stores from merchandise-driven to customer-driven using an intensive hands-on process of consulting, training, and mentoring. For more information on the topics in this article contact tshepherd@furninfo.com.

Furniture World is the oldest, continuously published trade publication in the United States. It is published for the benefit of furniture retail executives. Print circulation of 20,000 is directed primarily to furniture retailers in the US and Canada. In 1970, the magazine established and endowed the Bernice Bienenstock Furniture Library (www.furniturelibrary.com) in High Point, NC, now a public foundation containing more than 5,000 books on furniture and design dating from 1620. For more information contact editor@furninfo.com.